PIP coverage applies after insured drivers or their passengers get hurt in car wrecks. Primarily, it will pay for the costs of medical expenses they incur as a result of accident injuries. However, it usually also pays a variety of rehabilitation and assistance fees, lost income, and some policies even will pay a death benefit if someone gets killed in a wreck. Therefore, it can offer a comprehensive level of assistance for many of the losses a wreck might cause you or your family.
With PIP coverage, you often have the flexibility to choose terms and limits based on your individual needs. Though your health insurance might initially pay for accident injuries, these plans usually still have cost sharing requirements. Your PIP coverage might be able to help you pay for these costs and other expenses that your plan might not cover at all.
To qualify for a PIP claim, you won’t have to determine whether you or someone else caused the wreck. That is why PIP coverage is often called no-fault car insurance. You can file on your own policy after almost any accident. This can often save you from the hassle of having to file against someone else’s liability insurance for your injury costs.
Some states have instituted no-fault insurance requirements. In no-fault states, drivers use their PIP coverage to pay for certain injury costs first. Only after meeting certain thresholds (which vary by state) can a not-at-fault party file a claim against the at-fault driver’s liability insurance for compensation.
Say, for example, that you live in Florida, which is a no-fault state. The law requires most drivers to carry PIP insurance of at least $10,000. If you get hurt in a wreck, you must first file against your own PIP coverage for help with your injury costs. Once you PIP policy pays up to its maximum limit, then you might qualify to make a claim against the liability policy of the driver who caused the accident.
Since PIP coverage pays for injury costs regardless of fault, most no-fault states require drivers to carry this coverage. Other states, even those that are not officially no-fault, also require coverage.
States that require PIP coverage for all drivers are:
· Delaware ($15,000 per person/$30,000 per accident/$5,000 funeral expenses)
· Florida ($10,000 per person)
· Hawaii ($10,000 per person)
· Kansas ($4,500 per person and other requirements)
· Massachusetts ($8,000 per person, per accident)
· Michigan ($50,000 per person)
· Minnesota ($40,000 per person, per accident)
· New Jersey ($15,000 per person, per accident/up to $25,000 for certain claims)
· New York ($50,000 per person/$2,000 death benefit)
· North Dakota ($30,000 per person)
· Oregon ($15,000 per person)
· Pennsylvania ($5,000 per person, per accident)
· Utah ($3,000)
Several other states require insurers to offer PIP coverage to applicants. However, policyholders can reject the PIP coverage if they so choose:
· District of Columbia ($50,000 per person/$12,000 per person for lost wages/$4,000 for funeral expenses)
· Kentucky ($10,000 per person, per accident)
· Maryland ($2,500)
· Texas ($2,500 per person)
· Virginia ($2,000/up to $100 per week for lost wages for up to 12 months)
· Washington ($10,000 per accident)
Some states require drivers to carry a similar form of injury coverage called medical payments coverage, or MedPay protection. This coverage is similar to PIP coverage. However, it often provides a more limited set of benefits.